China's top banking regulator has ordered banks to investigate whether loans are being illegally funneled into the stock market and real estate, Reuters reports.

China has strict rules regarding property lending, but some insiders say these rules are often bent and sometimes broken. Similarly, Chinese stock market investors mainly use their own savings to buy stocks, rather than purchase stocks on margin borrowed from brokerage firms. But there have long been rumors that well-connected Chinese investors were finding ways to use borrowed money to purchase stocks.

The order comes from the China Banking Regulatory Commission (CBRC), according to the exclusive report from Reuters.

"The CBRC has recently found that some banks have loosened management of their lending practices, some industrial companies have illegally used bank credit to invest in stocks and property, while some individuals have used consumer loans to trade stocks," a source tells Reuters.

Reuters notes that it is not unusual for the CBRC to issue such orders, though it is unclear how it will actually implement them.

In related news, a senior policy adviser to China's central bank told reporters that surging asset prices were "the real worry" for the economy, according to a report by Dow Jones Newswires (via MarketWatch).

Meanwhile, on the inflation front, the mayor of Shanghai announced that he plans to raise the minimum wage by 15% and will accelerate plans to build subsidized housing. The new low rent housing will be open to the general public, as opposed to being limited to government workers. This new inventory could provide relief to many priced out of the red-hot housing market. It could, also, sap demand for housing and deal a shock to what many consider an over-inflated housing bubble.